It is pretty remarkable to see a tropical system actually develop an eye over land. As was mentioned above, whether or not a tropical cyclone is over water is not the sole determinant of whether it will weaken or not. In this case, the wind shear that had been impinging on the system from the west has relaxed, allowing the outflow to dramatically improve. As we've seen with a few other systems, the warm, humid, swampy conditions that prevail over south Florida can sustain (at least for awhile) a system in the strong tropical storm/low-end hurricane range if the other environmental factors are very favorable.

That said, Fay is running on fumes at this point and is starting to show a little strain. Cloud tops have warmed and the maximum winds on radar have come down slightly from earlier in the day. It is doing remarkably well for a tropical cyclone over land, but gradual weakening is still the most likely scenario until it emerges back over water. Model guidance is still not very clear on what happens with Fay after about 24 hours. NHC still has a very difficult forecast on their hands.

Radar has also been indicating some pretty intense small supercells in the outer bands of Fay over the Atlantic. These have tended to weaken as they move onshore, but areas near the coast will continue to see an enhanced tornado risk for the next several hours, along with a risk of damaging wind gusts.